COURAGE VS Abad

GR No. 400218

FACTS:
Courage filed a Petition for Certiorari/Prohibition with Prayer for Issuance of a
Temporary Restraining Order and/or Writ of Preliminary/Mandatory Injunction seeking to
declare Department of Budget and Management Circular No. 2011-5 as
unconstitutional, and to enjoin enjoin Social Welfare and Development Secretary
Corazon Soliman from enforcing the Circular in her department.
The Circular in question had placed a P25,000.00 ceiling on the amount of the
Collective Negotiations Agreement (CAN) incentive for 2011. The DSWD initially
authorized the payment of CNA incentives in two tranches for 2011, totaling
P30,000.00. It later issued a Memorandum direting its employees to refund the excess,
prompting the Petition’s filing.

ISSUE:
Whether or not the DBM Circular No. 2011-5 is unconstitutional.

RULING
No. The Court held that the P25,000.00 CAN incentive ceiling in the assailed
Circular is in consonance with law and existing rules. Executive Order No. 180 vested
PSLMC with the power to promulgate rules to implement it. This, however, did not
deprive the Department of Budget and Management of its power to issue rules on
compensation as a result of collective negotiations between government employees'
organizations and their employers.
As the governmental body that administers the national government's
compensation and position classification system, 149 the Department of Budget and
Management controls the payment of compensation to all appointive and elective
positions in government, including government-owned or controlled corporations and
government financial institutions.

DISCUSSION ON LABOR LAW

Nonetheless, labor organizations occupy a unique position in that they have the
constitutional and statutory right and duty to represent the workers within their
membership.
Article XIII, Section 3 of the Constitution states:
 SECTION 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of employment
opportunities for all.
It shall guarantee the rights of all workers to se(f-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the right to
strike in accordance with law. They shall be entitled to security of tenure, humane
conditions of work, and a living wage. They shall also participate in policy and decision-
making processes affecting their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers
and employers and the preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual compliance therewith to foster
industrial peace.
The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and the right of
enterprises to reasonable returns on investments, and to expansion and growth.
Article 242 of the Labor Code, as amended, provides that a labor organization
has the right to represent its members in collective bargaining, and to undertake all
activities to benefit the organization and its members:

ARTICLE 242. Rights of legitimate labor

organizations. A legitimate labor organization shall have the
right:
a. To act as the representative of its members.for the
purpose of collective bargaining;
b. To be certified as the exclusive representative of all the
employees in an appropriate bargaining unit for purposes of
collective bargaining;
c. To be furnished by the employer, upon written request,
with its annual audited financial statements, including the
balance sheet and the profit and loss statement, within thirty
(30) calendar days from the date ofreceipt of the request,
after the union has been duly recognized by the employer or
certified as the sole and exclusive bargaining representative
of the employees in the bargaining unit, or within sixty (60)
calendar days before the expiration of the existing collective
bargaining agreement, or during the collective bargaining
negotiation;
d. To own prope1iy, real or personal, for the use and benefit
of the labor organization and its members;
e. To sue and be sued in its registered name; and
.f To undertake all other activities designed to benefit the
organization and its members, including cooperative,
housing, welfare and other projects not contrary to law.
 Notwithstanding any provision of a general or special
law to the contrary, the income and the properties of
legitimate labor organizations, including grants,
endowments, gifts, donations and contributions they may
receive from fraternal and similar organizations, local or
foreign, which are actually, directly and exclusively used for
their lawful purposes, shall be free from taxes, duties and
other assessments. The exemptions provided herein may be
withdrawn only by a special law expressly repealing this
provision.

Labor organizations also ensure that workers participate in decision-making

processes that affect their rights, duties, and welfare. In Samahan ng Manggagawa sa
Hanjin Shipyard v. Bureau of Labor Relations:58

As Article 246 (now 252) of the Labor Code provides,

the right to self-organization includes the right to form, join or
assist labor organizations for the purpose of collective
bargaining through representatives of their own choosing
and to engage in lawful concerted activities for the same
purpose for their mutual aid and protection. This is in line
with the policy of the State to foster the free and voluntary
organization of a strong and united labor movement as well
as to make sure
that workers participate in policy and decision-making
processes affecting
their rights, duties and welfare.
The right to form a union or assocrnt10n or to self-
organization comprehends two notions, to wit: (a) the liberty
or freedom, that is, the absence of restraint which
guarantees that the employee may act for himself without
being prevented by law; and (b) the power, by virtue of which
an employee may, as he pleases, join or refrain from joining
an association.
In view of the revered right of every worker to self-
organization, the law expressly allows and even encourages
the formation of labor organizations. A labor organization is
defined as "any union or association of employees which
exists in whole or in part for the purpose of collective
bargaining or of dealing with employers concerning terms
and conditions of employment." A labor organization has two
broad rights: (1) to bargain collectively and (2) to deal with
the employer concerning terms and conditions of
employment. To bargain collectively is a right given to a
union once it registers itself with the DOLE. Dealing with the
employer, on the other hand, is a generic description of
 interaction between employer and employees concerning
grievances, wages, work hours and other terms and
conditions of employment, even if the employees' group is
not registered with the DOLE.
A union refers to any labor organization in the private
sector organized for collective bargaining and for other
legitimate purpose, while a workers' association is an
organization of workers formed for the mutual aid and
protection of its members or for any legitimate purpose other
than collective bargaining.
Many associations or groups of employees, or even
combinations of only several persons, may qualify as a labor
organization yet fall short of constituting a labor union. While
every labor union is a labor organization, not every labor
organization is a labor union. The difference is one of
organization, composition and operation.
Collective bargaining is just one of the forms of
employee participation. Despite so much interest in and the
promotion of collective bargaining, it is incorrect to say that it
is the device and no other, which secures industrial
democracy. It is equally misleading to say that collective
bargaining is the end-goal of employee representation.
Rather, the real aim is employee participation in whatever
form it may appear, bargaining or no bargaining, union or no
union. Any labor organization which may or may not be a
union may deal with the employer. This explains why a
workers' association or organization does not always have to
be a labor union and why employer-employee collective
interactions are not always collective bargaining. 59
(Citations omitted)

As discussed above, though not to the same extent as private employees, the
right to self-organize is likewise granted to government employees.